Set money

Capital is the lifeblood of any startup. More capital you, the faster you learn, can grow and achieve its vision. I know this is true from first hand experience. I from angel investors and venture capitalists have raised over $ 40m to promote the development of both my past and current business. Raising funds its downsides (mostly that give you some control), but if you respect the people you can increase rewards are enormous.

If you are just starting a business, you already have countless ways to trust your resourcefulness. And the resourcefulness and ingenuity around raising money that you past the platform and operating a business will get you through many other stages. Lack of funds is often the kiss of death for young companies. It does not have to be that way.

Your company or are raising funds for the initial launch of the second round of financing (or III) whether the safe, cash is king. You need money for product research, create and develop several designs, and those who are working with you to pay. And if you office space, technology, additional equipment, transportation needs, you'll need more money ... The list is endless, really.

Most small business owners, plus personal savings, loans and contributions from investors comes from the combination. As businesses grow, these sources have not really changed. Although larger businesses usually turn to more public options, many entrepreneurs at every stage of your life in your business continues to invest private funds.

Actually, I was broken down into two funding options:

1. People and raise money from investors

When my business partner, Martin Gates, and I were starting an online payroll service and financial management to try, we decided that we work for six months and will not draw a salary from the business. After the first six months, we agreed that if we met the milestones we do not pay a $ 25,000 a year to work on an easy task when you consider that we live in Silicon Valley and both the mortgage payment it!

The plan worked, we are sure that we cover the 18 months was not enough money in the bank made. We did not want to go 18 months without income, but we wanted to have enough cushion to protect us while we invest in building our product and team, we invest money in building prototypes but business will be establishment of infrastructure for a web application, and ultimately a point that would excite investors are getting the product.

Capital we put into our network was the addition, we had people who worked with us, who already feel comfortable with our business background and reputation approached. We say to them, wanted to, "We know, we know the market and we will invest in it." His response was: "We know you and trust you, go for it .." It was pleasant and powerful at the same time.

We do not ask the family had invested in the business. Mix with the family business is risky. In addition, the family to reduce the chance to really judge is likely to be able to. They are naturally available. Friends and business associates can judge its credibility and fair, they ask hard questions and forced to develop a better business model, and through them you have a strong network in the business beyond its capital needs help will be built. Also, I figured that if I pay the people who already know your business reputation could not get that, I could not get any money.

I do not stress this enough, someone to pay you what makes you really evaluate what you are getting the can. It helps you hone your business model figures and how to proceed.

Finally, your network of business friends and colleagues of the initial seed money to allow us to use to hire more people, create a strong marketing program and then go to venture capitalists show that the product was launched and had a market about 16 months, two short months of our 18-month deadline. We started business in August and December of next year in VC money raised.

Y modern company until I started, it was a very different situation. I trade partners, the success based on my previous contribution reached out to an even wider network. Having inherited a lot of success helps.



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